US car manufacturer struggling to survive after creditors reject ownership deal.
The negotiations were aimed at finding a suitable buyer for the US carmaker’s ailing European operations, including Opel and Britain’s Vauxhall Motors, in an attempt to shield them from GM’s looming bankruptcy in America.
$27bn in unsecured debt
On Wednesday, GM suffered another setback in the US when it failed to win approval for a crucial bond exchange proposal aimed at saving its domestic operations.
Two bidders, Fiat, the Italian carmaker and Magna International, the Canadian car parts maker, remain in the race to buy the struggling car giant’s European units.
Angela Merkel, Germany’s chancellor, is under pressure to push negotations forward, with around 25,000 German jobs at stake.
Berlin is also being urged to not strike a deal that would only protect domestic jobs – with another 25,000 people employed by GM Europe operations around the continent.
The European Commission has said it will host talks on Friday to co-ordinate efforts aimed at saving the Europe-wide operations, which are based in Germany, Belgium, France, Britain, Italy, Austria, Poland, Sweden, Spain and Hungary.
Karl-Theodor zu Guttenberg, Germany’s economy minister, said his government had “made demands on the US Treasury and expect answers by Friday, and we will need these answers in order to agree a plan”.
“We don’t have the security yet that we need to commit to bridge financing today,” he said.
Although the final decision on the fate of GM’s European operations lies with the company and the US government, Germany has a key role to play by stumping up a significant amount of the cash needed to keep the factories going.